Immigration ‘No answer’ to Pension Time Bomb

January 25, 2010

The ‘myth’ that continued mass immigration is the answer to Britain’s pensions time bomb has been described as ‘totally dishonest’ by a new report out today.

The report from think tank Migrationwatch, finds that the present ratio of workers to pensioners could only be sustained by immigration at a level that would bring the population of the UK to 119 million by 2051 and 303 million by the end of the century - obviously absurd propositions.

‘The pensions myth is just one in a long series of excuses that are trotted out in support of justifying the highest levels of immigration in our history, and each time they are examined in detail they fall apart as this study again demonstrates,’ said Migrationwatch chairman, Sir Andrew Green.

The report reviews the prospects for this ratio - known as the Potential Support Ratio (PSR) - in the light of the most recent population projections from the Office for National Statistics (ONS). It finds that, with no migration at all the ratio would fall from today’s level of 4.15 to 1.9 in 2051. If net migration continues at 180,000 a year, as the ONS predicts, the PSR would drop to 2.4 in that year. However, this improvement in the support ratio would require a continuing conveyor belt of new immigrants resulting in an extra 13.6 million people with all that that implies in what is already one of the most crowded countries in Europe.

The report quotes four major studies which have dismissed this approach. Most recently, the House of Lords Select Committee on Economic Affairs concluded that "arguments in favour of high immigration to defuse the "pensions time bomb" do not stand up to scrutiny…"

‘The Government have been running this dishonest argument for years. They have recently shaded it to talk about "helping" with the pensions problem but the reality is that any significant impact requires a huge and continuing increase in our population. They know it is no answer to the pensions problem and it is time they levelled with the British public and dropped this absurd argument,’said Sir Andrew.

Alan Johnson: .... You also have to take other factors into account. When I first became a Cabinet Minister in 2004 the big issue was the dependency ratio. We have an ageing population who are living longer ----

Q78 Mr Clappison: That is a different issue.

Alan Johnson: No, it is not a different issue, because at the time then we were looking at a dependency ratio that was 12 people working for every person retired when Lloyd George introduced the State Pension in 1907, to a situation where we now have four people working for every person retired, and to another projection in 2050 where we will only have two people working for every person retired. With a pay-as-you-go pension system those ramifications meant: how are we going to survive as a society with not enough young people to do the work? All of those elements are relevant.